United Technologies Corp. is in takeover talks with Rockwell Collins, Inc. in what would be one of the largest aerospace deals in history. In April, Rockwell Collins significantly increased in size as it closed a $6.4 billion acquisition of B/E Aerospace, which is expected to bring $3 billion in additional annual revenue to Rockwell’s existing $5.3 billion in sales.
BAE System, Bombardier, and Huntington Ingalls all reported 2Q17 earnings this past week with strong results. BAE reported earnings higher than consensus expectations with earnings per share (“EPS”) and revenue up ~17% and ~10% year-over-year (“YoY”), respectively. BAE’s new CEO, Charles Woodburn, credited this growth to the increasing defense budgets worldwide.
Earlier this week, the Terminal High Altitude Area Defense (“THAAD”) system, which was previously designed for short-range defense, had its first test against an intermediate-range ballistic missile (“IRBM”), a weaponry system mirroring North Korea’s. The results of the test were promising as the system seamlessly defended against the incoming threat.
Congress is currently discussing the 2018 military budget, which is centered around two main ideas: the human capital component and equipment element. The human capital portion is comprised of increasing military pay and growing the number of active troops.
The Senate Armed Services Committee unveiled a $700 billion defense authorization bill that will set the stage for a showdown with House budget planners and the White House over national defense spending priorities.
Both Boeing and Airbus outperformed analyst order expectations at the Paris Airshow this past week. At the end of the week-long show, Boeing and Airbus booked $75 billion and $42 billion in orders, respectively.
The 52nd biennial International Paris Air Show will take place from June 19th – 25th and will bring together 2,379 exhibitors from 47 countries to showcase the latest technological innovations in the industry. Notably, the show will include the first showing of the F-35 at the Paris Air Show and additional information regarding Boeing’s New Midsize Airplane (“NMA”).
Boeing CEO, Dennis Muilenburg announced this past week that Boeing will begin shifting a portion of its manufacturing work to China and other overseas markets. This move is a part of Boeing’s reshaping effort which hopes to increase the profitability of its core commercial jetliners and increase defense exports, while cutting costs.